Intellectual Ventures group will buy up Kodak's patents for $525 million.

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A group of 12 buyers has been found to buy Kodak's portfolio of 1,100 patents for $525 million. The sale is just about the bare minimum that is needed to keep the storied photo company alive; by selling its patents, it will meet the qualifications to get another $830 million loan, and it should be able to climb out of bankruptcy sometime next year.

The purchasing group was organized by Intellectual Ventures, the world's biggest patent-holding company, and RPX Corp., a defense-oriented patent aggregator. Intellectual Ventures will retain ownership of the patents, subject to all licenses.

According to the LA Times, bankruptcy filings show that the twelve buying companies are: Google, Apple, Facebook, Research in Motion, Amazon, Microsoft, Samsung, Adobe, Huawei Technologies, HTC, Fujifilm, and Shutterfly.

Kodak has sued several members of that list for patent infringement, including Samsung, Apple, RIM, HTC, and Shutterfly. The sale agreement is also an agreement to end all existing litigation between Kodak and any buyers, according to Kodak's statement on the deal.

“This monetization of patents is another major milestone toward successful emergence,” Antonio M. Perez, chairman and chief executive officer, said. “Our progress has accelerated over the past several weeks as we prepare to emerge as a strong, sustainable company.”

However, many Kodak patents may still end up out "in the wild" and could be used in lawsuits. The group of 12 paid for a "portion" of the sale, but Intellectual Ventures is actually going to own the portfolio and can use it as it wishes—it just can't sue already-licensed companies, such as this group of 12 buyers.

Intellectual Ventures has filed several lawsuits of its own in the past few years, and has also handed off patents to smaller patent-holding companies to use in litigation.

That's a roundabout way of saying that Kodak patents may well be popping up in future patent troll suits in the future. After all, somebody is going to have to get their $525 million back.

As far as I know IV doesn't manufacture anything, but they do have one of the most impressive R&D labs. They do make stuff, but it's almost all related to research to get more patents and not for actual consumers. IV licences their hardwork and research.

Then on the flipside, IV is supposed to represent a group of the major tech companies to protect their patents. This is where they get the bad name (and deservedly)

One of the most impressive R&D labs? That's quite an exaggeration. Can you name a few patents from 'IV labs' that have truly advanced the state of the art in any field?

Of course they're eager to show a few pictures of equipment and list some PhDs who are associated with their various 'labs' on the website. This provides a front of legitimacy to their operation. However, all accounts point to the fact that the vast majority of their revenue comes from hoarding patents from other companies and extorting licensing fees under the threat of litigation.

Why does purchasing these patents make Intellectual Ventures a troll? Patents can be bought and sold like any other property.

I agree.

Ars I'm disappointed by this headline. It's one thing to discuss the term "Patent Troll" in the abstract but with it's obviously negative connotations it shouldn't be applied lightly. In this case it's done carelessly and without any analysis.

In this case the "Troll" ended up being the highest bidder. Patents exist to generate revenue for their creators and here, clearly, the "Troll" was facilitating exactly that.

Obviously the negative ratings given to comments like this illustrate the minority of my opinion on this particular matter. But if I wanted low quality popularity based news with artificially combative headlines I'd go elsewhere.

Suggest you read the history of patents. They aren't there to generate revenue for their owners ... More like to encourage useful arts and sciences.The behavior by companies like this (a clear patent troll) are a clear perversion of the system. They will do the opposite of what they were created for.Society loses out and you think this is a good thing?

Kodak got into this mess by not evolving into the digital age when all signs pointed to that being the direction of photography

Well, that's a complete re-writing of history.Fact is, Kodak was one of the first on the scene with good quality consumer digital cameras. For several years, their cameras were affordable, class-leading gear. Now, I absolutely believe Kodak dropped the ball by not taking their early success and building on it. Instead, they stayed with their earlier designs and got run-over by more innovative designs. But, that's hardly a failure to "evolve into the digital age", as if they stayed with film until the end.

Right, and they clearly sucked at it and didn't go "all-in" or they wouldn't be in the situation they are in now. See my edit to my original post.

Why does purchasing these patents make Intellectual Ventures a troll? Patents can be bought and sold like any other property.

I agree.

Ars I'm disappointed by this headline. It's one thing to discuss the term "Patent Troll" in the abstract but with it's obviously negative connotations it shouldn't be applied lightly. In this case it's done carelessly and without any analysis.

In this case the "Troll" ended up being the highest bidder. Patents exist to generate revenue for their creators and here, clearly, the "Troll" was facilitating exactly that.

Obviously the negative ratings given to comments like this illustrate the minority of my opinion on this particular matter. But if I wanted low quality popularity based news with artificially combative headlines I'd go elsewhere.

Suggest you read the history of patents. They aren't there to generate revenue for their owners ... More like to encourage useful arts and sciences.

Yes, by allowing the owners to generate revenue... that's the trade-off: we give you protection for your invention so that you may monetize, it and it encourages invention. If you have no desire to sell, marketing or to monetize your invention in any way then you don't need (and wouldn't apply for) a patent or for a copyright.

Quote:

The behavior by companies like this (a clear patent troll) are a clear perversion of the system. They will do the opposite of what they were created for.Society loses out and you think this is a good thing?

That's crazy. How on earth does society lose-out on something that was already patented? Either Kodak could sue over these patents or this group of 12 companies... nothing changes as the patents still exist and their lifetime isn't extended. If I'm sued by Kodak I'm not going to say "well at least I wasn't sued by a patent by a patent cabal".

Moreover, this is will probably be used defensively so that no one else purchases the patents and sues them; which is why 12 companies which are kinda diverse in their businesses banded together. At $525M that's $43M per company which could be a whole lot less than the ugly-side of a court decision if a REAL patent troll purchased the patents and sued any of them.

For the people who use products made by those companies, that's a good thing (for everyone else, it's business-as-usual).

Pardon my ignorance, but I thought a patent holder had to make use of a patent in order to show harm from patent infringement. For instance, Intellectual Ventures would show harm in the form of sales lost to a competing company that is using Intellectual Ventures' patents and depriving Intellectual Ventures of compensation for its invention (I use "its invention" loosely here). Beyond that, sitting on a patent seems like a potential societal harm in terms of depriving society of whatever whiz-bang idea the patent covers.

Or maybe those were just good ideas that I heard somewhere that are not part of patent law.

Right, and they clearly sucked at it and didn't go "all-in" or they wouldn't be in the situation they are in now. See my edit to my original post.

No, they did not. For a fair old while, they were right up there. The DCS SLR was well ahead of it's time. The Dynamic range and Pixel count were nothing short of astounding for it's day. Some of the Consmer cameras were class-leading.

Right, and they clearly sucked at it and didn't go "all-in" or they wouldn't be in the situation they are in now. See my edit to my original post.

No, they did not. For a fair old while, they were right up there. The DCS SLR was well ahead of it's time. The Dynamic range and Pixel count were nothing short of astounding for it's day. Some of the Consmer cameras were class-leading.

Your point is irrelevant, much like Kodak's products right now. Whether or not one of their cameras was a good product or not does not change the fact that they failed, as a company, to effectively bridge the gap into digital cameras.

For what its worth, I owned one of Kodak's early digital cameras, although it was a consumer model not a DSLR. The thing was bulky and it used 4AA batteries for power and wrote to CF cards, but the quality of the image (even at a paltry by today's standards 2 megapixels) was surprisingly good. The sensor was good in low light and had very little noise. The bulky build made it a tank, the camera still works fine today.

By comparison, my roommate got a Nikon prosumer camera at around the same time, spent a lot more for it, and was generally disappointed with the muddy grainy images it produced in anything but full direct sunlight.

These days I use a Canon superzoom, or more frequently, my smartphone. The biggest danger to the digital camera business is by far the rapid improvement in smartphone cameras. Only a few years ago your average smartphone camera was a low resolution fixed focus afterthought. Now phone cameras are good enough for Facebook and many other common uses. Kodak is probably making the right move in focusing on big commercial printing. DSLRs still have a place in the world, but at this point I don't think Kodak has much chance breaking into that market.

Right, and they clearly sucked at it and didn't go "all-in" or they wouldn't be in the situation they are in now. See my edit to my original post.

No, they did not. For a fair old while, they were right up there. The DCS SLR was well ahead of it's time. The Dynamic range and Pixel count were nothing short of astounding for it's day. Some of the Consmer cameras were class-leading.

Kodak probably suffered from the classic big company syndrome. While the world was moving towards digital, the bulk of their revenues were probably still coming from film, so I am sure some of the better engineers were still working on film as opposed to digital.

I also agree that Kodak had some great digital cameras in the beginning. They just did not build upon them at all. Probably because the business guy running the much smaller digital side did not have enough clout to push back against the guy running the larger film side.

Right, and they clearly sucked at it and didn't go "all-in" or they wouldn't be in the situation they are in now. See my edit to my original post.

No, they did not. For a fair old while, they were right up there. The DCS SLR was well ahead of it's time. The Dynamic range and Pixel count were nothing short of astounding for it's day. Some of the Consmer cameras were class-leading.

Your point is irrelevant, much like Kodak's products right now. Whether or not one of their cameras was a good product or not does not change the fact that they failed, as a company, to effectively bridge the gap into digital cameras.

And If You had left out the patently false "and they clearly sucked at it" part, I wouldn't have replied, and would be in agreement. The point is not irrelevant, they most certainly did not suck at making digital cameras. They not only bridged the gap, but invented the damn bridge itself.

They problem with Kodak, as mentioned, was that they were a *huge* company, and had other revenues elsewhere that dried up much faster than anyone anticipated. As it is, for cheap-to-run printers, they can't be beaten right now. The only caveat is that the DPI is, ironically for a company that was traditionally photography-based, crap, and sucks at pictures of anything other than scrapbook quality. I do use one for general printing, invoices etc, and I love it.

Why does purchasing these patents make Intellectual Ventures a troll? Patents can be bought and sold like any other property.

A patent troll is a company without products that exists only to own patents and sue others. IV is the perfect example.

But this definition would also include universities etc. who invent/patent things (which are often then stuck into a 'holding' company) but then intend to license them for revenue, rather than go into business producing consumer products/medicines or whatever themselves.

I wish Ars would clearly state what is and is not a patent troll. How is the behaviour defined. If its simply that they do not produce a product, well, lots of entities meet that definition, ranging from small inventors to massive government and university research labs.

A cursory glance through IV's job page shows that they do a serious amount of research, and anyone in the Seattle area with a decent research or development background has likely had job contacts from IV on LinkedIn. I know I have, and I'm not an attorney.

Articles like this are why Joe is percieved by many as an activist, rather than a reporter.

And If You had left out the patently false "and they clearly sucked at it" part, I wouldn't have replied, and would be in agreement. The point is not irrelevant, they most certainly did not suck at making digital cameras. They not only bridged the gap, but invented the damn bridge itself.

They problem with Kodak, as mentioned, was that they were a *huge* company, and had other revenues elsewhere that dried up much faster than anyone anticipated. As it is, for cheap-to-run printers, they can't be beaten right now. The only caveat is that the DPI is, ironically for a company that was traditionally photography-based, crap, and sucks at pictures of anything other than scrapbook quality. I do use one for general printing, invoices etc, and I love it.

Fair enough, but for the record by "clearly sucked at it" I was referring to their ability to transition from a purely film to a digital-age imaging company. I didn't say their digital products sucked, that was something you read between the lines. Plenty of companies make innovative products but fail, because of lack of consumer demand, poor marketing, mismanagement, or otherwise.

The US constitution provides for patent and copyright law to "encourage innovation". Is there any possibility that someone might challenge the current laws as being a brake on innovation, and stifling the average inventor?

It is extremely difficult how innovation benefits from the sale of patents.

Intellectual Ventures is a patent troll. Its primarily a law firm that even farms out patents to other companies, sharing the spoils. They claim R&D but This American Life looked at some of their claims and it was mostly shady BS and didn't benefit the inventors. The episode is free IIRC. Intellectual Ventures is a leech on society.

I wish Ars would clearly state what is and is not a patent troll. How is the behaviour defined. If its simply that they do not produce a product, well, lots of entities meet that definition, ranging from small inventors to massive government and university research labs.

A cursory glance through IV's job page shows that they do a serious amount of research, and anyone in the Seattle area with a decent research or development background has likely had job contacts from IV on LinkedIn. I know I have, and I'm not an attorney.

Articles like this are why Joe is percieved by many as an activist, rather than a reporter.

It's not always exactly clear what is or isn't a patent troll, and it's somewhat in the eye of the beholder (as commenters on this article and many others have noted.)

The problem with the alternatives is that they don't at all state clearly what the company is doing. Here are some alternatives:

1) Patent-holding company (doesn't get across the idea of serial assertions / lawsuits)

2) Patent-licensing company. (doesn't get across the idea that all the licensing is done via lawsuits or threats)

3) Non-practicing entity (Doesn't get across the idea of filing lawsuits; also jargon and a deliberately euphemistic term invented by lawyers)

4) Patent-assertion entity (probably the most exact, but still fairly jargon-ish and was invented by the government)

... given the lack of non-jargon alternatives, I think "patent troll" is a good example of a colloquial term used in the tech world, and I think I'm using it appropriately.

Also, I agree there are borderline cases as to what is a patent troll. It's just that IV isn't one of those cases.

I wish Ars would clearly state what is and is not a patent troll. How is the behaviour defined. If its simply that they do not produce a product, well, lots of entities meet that definition, ranging from small inventors to massive government and university research labs.

A cursory glance through IV's job page shows that they do a serious amount of research, and anyone in the Seattle area with a decent research or development background has likely had job contacts from IV on LinkedIn. I know I have, and I'm not an attorney.

Articles like this are why Joe is percieved by many as an activist, rather than a reporter.

It's not always exactly clear what is or isn't a patent troll, and it's somewhat in the eye of the beholder (as commenters on this article and many others have noted.)

The problem with the alternatives is that they don't at all state clearly what the company is doing. Here are some alternatives:

1) Patent-holding company (doesn't get across the idea of serial assertions / lawsuits)

2) Patent-licensing company. (doesn't get across the idea that all the licensing is done via lawsuits or threats)

3) Non-practicing entity (Doesn't get across the idea of filing lawsuits; also jargon and a deliberately euphemistic term invented by lawyers)

4) Patent-assertion entity (probably the most exact, but still fairly jargon-ish and was invented by the government)

... given the lack of non-jargon alternatives, I think "patent troll" is a good example of a colloquial term used in the tech world, and I think I'm using it appropriately.

Also, I agree there are borderline cases as to what is a patent troll. It's just that IV isn't one of those cases.

What does IV do that is different from any other research lab? Include academic and government labs in that please.

If you want to say that a patent troll is a non-practicing entity that does little or no original research and exists purely to scavenge patent portfolios of the bankrupt or desperate in order to file lawsuits against practicing entities, I think you will get little disagreement.

Of course IV, and several others, do not fit that definition. In general you seem to broaden the term to include companies you have arbitrarily decided not to like. In reality, IV is itself a research firm, as well as a one stop shop for cross licensing between actual practicing entities. That's actually kind of cool, and overall it *reduces* patent litigation.

How about the farming out to non practicing entities which solely consist of patent lawyers for the explicit purpose of litigation? IV buys patents no one is litigating over and starts litigating. How is that reducing litigation.

I wish Ars would clearly state what is and is not a patent troll. How is the behaviour defined. If its simply that they do not produce a product, well, lots of entities meet that definition, ranging from small inventors to massive government and university research labs.

A cursory glance through IV's job page shows that they do a serious amount of research, and anyone in the Seattle area with a decent research or development background has likely had job contacts from IV on LinkedIn. I know I have, and I'm not an attorney.

Articles like this are why Joe is percieved by many as an activist, rather than a reporter.

It's not always exactly clear what is or isn't a patent troll, and it's somewhat in the eye of the beholder (as commenters on this article and many others have noted.)

The problem with the alternatives is that they don't at all state clearly what the company is doing. Here are some alternatives:

1) Patent-holding company (doesn't get across the idea of serial assertions / lawsuits)

2) Patent-licensing company. (doesn't get across the idea that all the licensing is done via lawsuits or threats)

3) Non-practicing entity (Doesn't get across the idea of filing lawsuits; also jargon and a deliberately euphemistic term invented by lawyers)

4) Patent-assertion entity (probably the most exact, but still fairly jargon-ish and was invented by the government)

... given the lack of non-jargon alternatives, I think "patent troll" is a good example of a colloquial term used in the tech world, and I think I'm using it appropriately.

Also, I agree there are borderline cases as to what is a patent troll. It's just that IV isn't one of those cases.

What does IV do that is different from any other research lab? Include academic and government labs in that please.

If you want to say that a patent troll is a non-practicing entity that does little or no original research and exists purely to scavenge patent portfolios of the bankrupt or desperate in order to file lawsuits against practicing entities, I think you will get little disagreement.

Of course IV, and several others, do not fit that definition. In general you seem to broaden the term to include companies you have arbitrarily decided not to like. In reality, IV is itself a research firm, as well as a one stop shop for cross licensing between actual practicing entities. That's actually kind of cool, and overall it *reduces* patent litigation.

The distinction between a non-practicing and practicing entity is not only difficult to define in the first place but it's completely irrelevant if you could. It doesn't matter whether it's car dealerships, a fish market or stock traders every market is facilitated by non-practicing entities. Should you have to prove you eat fish to buy and sell them? No, because it doesn't matter.

And this example, despite the usual chorus of people, including the story author, throwing in the "Patent Troll" label is a clear example of why - they were the highest bidder! Kodak benefited from their existence, everyone holding a patent had the value go up because of the demonstrated market for them, and everyone considering innovation is encouraged.

I wish Ars would clearly state what is and is not a patent troll. How is the behaviour defined. If its simply that they do not produce a product, well, lots of entities meet that definition, ranging from small inventors to massive government and university research labs.

A cursory glance through IV's job page shows that they do a serious amount of research, and anyone in the Seattle area with a decent research or development background has likely had job contacts from IV on LinkedIn. I know I have, and I'm not an attorney.

Articles like this are why Joe is percieved by many as an activist, rather than a reporter.

It's not always exactly clear what is or isn't a patent troll, and it's somewhat in the eye of the beholder (as commenters on this article and many others have noted.)

The problem with the alternatives is that they don't at all state clearly what the company is doing. Here are some alternatives:

1) Patent-holding company (doesn't get across the idea of serial assertions / lawsuits)

2) Patent-licensing company. (doesn't get across the idea that all the licensing is done via lawsuits or threats)

3) Non-practicing entity (Doesn't get across the idea of filing lawsuits; also jargon and a deliberately euphemistic term invented by lawyers)

4) Patent-assertion entity (probably the most exact, but still fairly jargon-ish and was invented by the government)

... given the lack of non-jargon alternatives, I think "patent troll" is a good example of a colloquial term used in the tech world, and I think I'm using it appropriately.

Also, I agree there are borderline cases as to what is a patent troll. It's just that IV isn't one of those cases.

The problem Joe, is that is your implication both here and in the headline that IV is somehow in the wrong either in this case, or in general. That's the problem because the case that "Patent Trolls", as commonly defined (and I think we agree on that definition), are negative in and of themselves is not a case that's closed. The problem is that you're presenting it as such. On these forums, I get that it is. But as a writer here you have a higher responsibility. If you're going to apply a negative term like patent troll, you need the analysis to back it up.

Most sites I've come across say Texas Instruments or Sony was the first to actually make a hand held digital camera in 1981. And Apple was the first to make a hand held digital camera for consumers in 1994.

Who are you going to believe?

Just remember what a very good historian once said: (paraphrased) History is often more a reflection of the historian than actual history, because it is the historian who decides which facts/tidbits of information are important. Actual history as it is researched is only a series of data points/facts/tidbits. Snapshots of time if you will, that the historian pieces together to tell the story. Think about it, if all that a historian thought was important about your life (or if the only information he could find) is what you did between 5 and 7 p.m. each day, he would write that most the important thing to you was eating, or commuting, or whatever. But it would be a very slanted view of you the person!

How about the farming out to non practicing entities which solely consist of patent lawyers for the explicit purpose of litigation? IV buys patents no one is litigating over and starts litigating. How is that reducing litigation.

1) How is that any different than any other company subcontracting a portion of its business operations? How is it any different than a university handing off a set of patents to a law firm to go after infringers(they do this, btw).

2) Companies that buy into the IV patent pool are not themselves subject to the suits, since they include most of the major players, lawsuits in general are greatly reduced even if in some specific situations the existence of IV facilitates a suit. Of course without IV it would be someone else so I have difficulty believing that they are actually exacerbating the problem...

How about the farming out to non practicing entities which solely consist of patent lawyers for the explicit purpose of litigation? IV buys patents no one is litigating over and starts litigating. How is that reducing litigation.

1) How is that any different than any other company subcontracting a portion of its business operations? How is it any different than a university handing off a set of patents to a law firm to go after infringers(they do this, btw).

2) Companies that buy into the IV patent pool are not themselves subject to the suits, since they include most of the major players, lawsuits in general are greatly reduced even if in some specific situations the existence of IV facilitates a suit. Of course without IV it would be someone else so I have difficulty believing that they are actually exacerbating the problem...

Just because the are other shitbags such as IV, does not make IV less of compilation of shitbags.

How about the farming out to non practicing entities which solely consist of patent lawyers for the explicit purpose of litigation? IV buys patents no one is litigating over and starts litigating. How is that reducing litigation.

1) How is that any different than any other company subcontracting a portion of its business operations? How is it any different than a university handing off a set of patents to a law firm to go after infringers(they do this, btw).

2) Companies that buy into the IV patent pool are not themselves subject to the suits, since they include most of the major players, lawsuits in general are greatly reduced even if in some specific situations the existence of IV facilitates a suit. Of course without IV it would be someone else so I have difficulty believing that they are actually exacerbating the problem...

Just because the are other shitbags such as IV, does not make IV less of compilation of shitbags.

Read your comment again. That was your entire argument.

No, the argument was that they reduced litigation, and they do. Large segments of the tech industry are represented by IV, and on patents in their pools, they do not sue each other. Which means litigation is being reduced.

In the long run if the majority of patents were committed to similiar ventures, it would have the effect of standardizing licensing and make it very simple to estimate costs of entering a market segment since one would have to simply inquire with the large pools and get a estimate, ideally one that another could reduce by putting their own patents into the pool for others.

This is basically a privatized patent pool, similiar to what MPEG-LA and other standards bodies already operate, but in a more generalized sense.

Its extortion that is what it is. IV buys patents no one is litigating over and starts litigating. Your only argument against that was that someone else would. All talk about patent pools is BS because it is in essence an extortion racket. There is no pool. All the companies involved would rather not do business with IV than pay for fear of litigation.

Its extortion that is what it is. IV buys patents no one is litigating over and starts litigating. Your only argument against that was that someone else would. All talk about patent pools is BS because it is in essence an extortion racket. There is no pool. All the companies involved would rather not do business with IV than pay for fear of litigation.

No it's not. Again this is a popular opinion, around here in particular, but that doesn't make it right. The uproar over patent trolls is strikes me like creationism - a kernel of belief combined with an attempt to veil it in reason. All the reasoning crumbles as soon as you look at it.

For example one thing you chose not to address was reflex-croft's point about outsourcing. If a company or individual doesn't want to find infringers/negotiate/litigate themselves it's completely legitimate for them to sell or license their patents to a company that will. This requires non practicing entities.

The term non-practicing entities, as I've argued is impossible to define and irrelevant if you could anyway. We don't require that fish monger eat fish because it just doesn't matter if they do. In most markets, such as real estate - landlords for example specialize in managing properties they don't use themselves - people understand this intuitively, but in this case the same exact thing generates uproar.

This brings us to the to the lawsuits which is the real problem. People don't like lawsuits. Fine, specialized patent companies generate lawsuits, actually yes, it's a huge part of their business. But so what, that's how the patent system works - lawsuits are the way you're supposed to enforce patents. It hardly matters whether the lawsuit originates with the patent creator or not. A bad lawsuit from Apple is no better than the same lawsuit from IV

Finally if companies like IV serially submit bad lawsuits yet find a way to profit from it then our system is bad. Lawsuits are expensive, companies that only lose will go out of bushiness. On the other hand if companies file lawsuits and keep winning then you can't blame them for it.

At the end of the day, there is just no way define a patent troll in an enforceable way. The system needs to be fixed directly. Time spent trying to define and villainize so "Patent Tolls" is simply a waste.